Bill to raise Kentucky minimum wage heads to Senate

Opponents say legislations is 'unfunded mandate'

After nearly three hours of heated debate, the House passed a bill that would raise Kentucky’s minimum wage from $7.25 to $10.10 over a three-year period.

Supporters of House Bill 1, sponsored by House Speaker Greg Stumbo, said the measure would provide a living wage to thousands of Kentuckians working for minimal pay, but critics countered that raising the minimum wage would prove detrimental to the state’s business climate.

The final vote — 54-44, with Reps. Susan Westrom, D-Lexington, and Jim Gooch, D-Providence not voting — came largely along party lines, with some defectors from both sides. Reps. Dwight Butler, R-Harned, C.B. Embry, R-Morgantown, Jim Stewart, R-Flat Lick, and Jill York, R-Grayson, sided with Democrats favoring HB 1 while Reps. Robert Damron, D-Nicholasville, and Fitz Steele, D-Hazard, voted with Republicans against the bill.

Stumbo, D-Prestonsburg, said after the vote he knew some Democrats in his caucus had issues with raising the minimum wage. With an overwhelming majority passing the last minimum wage hike, from $5.85 to $7.25 in 2007, Stumbo said he was confident members of the GOP would tilt the vote in HB 1’s favor.

“We took the vote to the floor on the premise that the members, after hearing a very thorough and heated floor debate, would do the right thing for working women and working families of Kentucky,” he said. “… It’s a shame that they politicized the issue, those that stood in opposition, but that’s their prerogative.”

In his floor speech, Stumbo said passing HB 1 would send a message to low-wage Kentuckians that the American dream is still attainable.

Two-thirds of those working minimum-wage jobs in Kentucky are women, Stumbo said. HB 1 includes a provision guaranteeing pay equity based on gender and would raise the minimum wage 95 cents per year until reaching $10.10 by July 1, 2016. The legislation, as amended Thursday, would not affect businesses with annual gross sales of less than $500,000.

“Somebody living somewhere in Kentucky is going to be able to afford something for that child in their home,” he said. “Somebody’s going to be able to pay the light or heat bill that they couldn’t otherwise do.

“… Somebody’s life will be better because of what you did here today and the course that you set for this state.”

House Minority Leader Jeff Hoover, R-Jamestown, said the proposal would cost jobs, citing a study that showed for every 10 percent increase in the minimum wage, unemployment rates rise 1 percent.

Hoover also cited LRC figures showing local governments would pay $5 million more in wages annually and school districts $4.8 million more in payroll per year once HB 1 is fully implemented.

Rep. Julie Raque Adams, R-Louisville, said local governments may be forced to decide between raising taxes or laying off staff to keep pace with rising payrolls, should HB 1 become law.

“These are taxpayer-funded entities,” she said. “… We need to understand that we’re going to have to look at all of our county clerks, all of our county judge-executives, all of our magistrates, and we’re going to say, ‘We are handing you an unfunded mandate.’”

A minimum wage hike could also cause a “stair-step” effect for other workers’ pay, further increasing personnel costs on businesses, said Rep. Stan Lee, R-Lexington.

Stumbo and other Democrats dismissed Republicans’ concerns. He cited a Center for Economic and Policy Research study that showed modest increases in the minimum wage had little or no effect on joblessness.

Rep. Jim Wayne, D-Louisville, said experts with the American Economic Association have come to the same conclusion.

“If your business plan is so weak that a 95-cents-an-hour increase in the wages of your employee will bankrupt you, my God, go back to business school,” he said. “There’s something wrong with your business plan and your business acumen.”

Want to leave your comments?

The underlying problem is illegal immigration. There is no upward pressure on the lower scale wages because there are lots of illegals willing to work for that or less. They can stay in thier third world country and make 8 bucks in a day maybe, or they can jump the fence and make that in an hour. Take care of the illeagals and the subsidized poverty and the wage scale will follow. Supply and demand works.

Brunouno

February 8, 2014 9:50AM

this should have been done in the US House of Reps., but of course, a LOT of things should have been done in the US House...what have they been doing instead of creating jobs? Abortion and trying to repeal Obamacare nearly 50 times. That's it! The House Repugs Do Nothing Congress throwing the country under the bus to try to make our black President look bad.

Thanks Greg Stumbo and Governor Beasher for doing the right thing!

ukfan

February 7, 2014 3:39PM

95 cents PER year until it reaches $10.10. Not all at once. If they can pay CEO's the salaries and bonuses that they pay...I believe they can pay the actual people that do the work this small amount without any strain on their bottom line. The Center for Economic and Policy Research study showed MODEST (and this would be modest) increases in the minimun wage has little or no effect on joblessness.

jdmdaily

February 7, 2014 12:58PM

user_38166 -- Maybe you should check out business school and take a freaking economics class before talking. I do own a small business and have put together several business plans. There are several tax loop holes for us too and on top of that if you are Grossing less than 500,000 a year, you are not affected by the hike. Simple "Math School math" bud-- If you are grossing 500,000 a year and your profit margin is less that 20% Yes! There is something wrong with your business!! Thats a 100,000k right there. If you are grossing 500,000k a year honestly how many employees do you think you'll carry sir?

user_38166

February 7, 2014 11:58AM

“If your business plan is so weak that a 95-cents-an-hour increase in the wages of your employee will bankrupt you, my God, go back to business school,” he said. “There’s something wrong with your business plan and your business acumen.”

Maybe Mr. Wayne should spend some time in math school and/or actually try to understand what he's voting on. FYI genious - its not $.95/hour. Its 3x that. And by the way, how many payrolls and business plans have you put together before or during your 25 years in the legislature? Just curious.

ukfan

February 7, 2014 11:03AM

It's way pass time to do this. It's not only morally right but also economically. Should have been done a long time ago.